The Energy and Petroleum Regulatory Authority (EPRA), on Monday, August 14, reinstated the fuel subsidy programme President William Ruto scrapped on September 15, 2022.

In its review of this month's pump prices, the authority noted that the Petroleum Development Fund was reinstated to cushion Kenyans from higher fuel costs which was caused by the doubling of the Value Added Tax (VAT) on petroleum products from 8 to 16 per cent.

EPRA further explained that the increased landing costs of fuel also occasioned the return of the subsidies which Ruto campaigned against and even accused the previous regime of misusing the funds to benefit select oil marketers.


As per EPRA's calculations, the cost of Super Petrol was to hit Ksh202.01 without the subsidy programme- a difference of Ksh7.33 from the current prices.
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The authority added that the reintroduced Petroleum Development Fund will thus be used to compensate importers of the commodity at Ksh7.33, Ksh3.59 and Ksh 5.74 per litre of petrol, diesel & kerosene, respectively.

With the subsidy in place, the government ensured that fuel costs for the period starting August 15 to September 14 remained unchanged. Super Petrol, Diesel, and Kerosene will retail at Ksh194.68, Ksh179.67, and Ksh169.48, respectively.


"In order to cushion consumers from the spike in pump prices as a consequence of the increased landed costs, the government has opted to stabilize pump prices for the August-September 2023 pricing cycle," EPRA explained.

"Oil Marketing Companies will be compensated from the Petroleum Development Fund," it added.

Uhuru's Subsidy

Former President Uhuru Kenyatta's administration initiated the subsidy programme to moderate pump prices, which also influence the prices of essential commodities such as foodstuffs. Kenya, under Uhuru, spent an average of Ksh7.65 billion monthly to subsidise diesel, super and kerosene.


His successor, President William Ruto, was one of the most prominent critics of the subsidy programme, which he described as unstainable.

Ruto expressed concern that few individuals were benefitting from the programme at the expense of the taxpayers who had to foot the bill for the importers.

Former President Uhuru Kenyatta speaking during the Jubilee Party National Delegates Convention (NDC)on May 22, 2023.
Former President Uhuru Kenyatta speaking during the Jubilee Party National Delegates Convention (NDC)on May 22, 2023. PHOTO JUBILEE PARTY
"On fuel subsidy alone, the taxpayers have spent a total of Ksh144 billion, a whopping Ksh60 billion in the last four months," Ruto stated during his September 13, 2022 inauguration.

"If the subsidy continues to the end of the financial year, it will cost the taxpayer Ksh280 billion, equivalent to the entire national government development budget," he added.

IMF's Stance on Subsidies

Removal of the subsidies was said to be among the conditions set by the International Monetary Fund (IMF) to grant loans to President William Ruto.

"The authorities intend to continue gradually realigning domestic to global fuel prices in the financial year 2022/23 so as to eliminate the fuel subsidy by October 2022,” the IMF said in the third programme review for Kenya's Ksh270.2 billion ($2.34 billion) loan package.

“The authorities also plan to complete by end-July 2022 a review of the application of Kenya’s fuel pricing mechanism and constitute a task force to oversee the progressive elimination of the fuel subsidy within the first half of FY2022/23 and to ensure that fuel pricing actions are at all times aligned to the approved budget (new structural benchmark)," IMF added in July this year.

It is yet to be clear whether IMF approved Kenya's fiscal policy changes, especially after praising Ruto for sustaining the economy. However, in recent months, Ruto criticised the IMF and World Bank for issuing loans with strict conditions and called for a robust system that guarantees financial freedom.

HumbledbyGrace mukina2 osystein pls front page/main page /general page.

Kenya don backtrack. Very few leaders have the courage to follow through with a true removal of subsidy.

Subsidy removal is like removing food from the mouth of a baby. The baby go cry so tay u go wan lose ur mind. That is why successive governments have been leaving it for the next.

Before subsidy removal especially during scarcity, you will hear Nigerians say. "All I want is fuel no matter the amount". Now when jungle mature and they removed subsidy and fuel full station, the song change.

Even all the financial experts on radio and TV who were telling us that we do not have a choice but to remove subsidy have all gone quiet, now the president has to bear the cross alone. Moral lesson, do not base your decision on people who have nothing to lose. They can talk you into taking an action that you are not prepared for and then completely distant themselves from the fallout of those actions.

Like..

Proactive governments

Tinubu should do the same.

Yinkusgold:
Tinubu should do the same.

Story. Man wey don save 1 trillion na him you dey tell make him do u turn. Btw he say make you endure.

Bluntguy:

Story. Man wey don save 1 trillion na him you dey tell make him do u turn. Btw he say make you endure.

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Ok , dey enjoy the 1 trillion with him now, make him no return subsidy , you go learn.

All these Western puppets.
Ruth received sense at the Paris Summit when Macron was just talking down on them. Since then, he realised the Western powers have no interest in the development of the African continent apart from ensuring they remain tied to their apron strings.
Tinubu is on the road to his epiphany as well